Ecosystem services provided by coral reefs may be susceptible to the combined effects of benthic species shifts and anthropogenic nutrient pollution, but related field studies are scarce. We thus investigated in situ how dissolved inorganic nutrient enrichment, maintained for two months, affected community-wide biogeochemical functions of intact coral- and degraded algae-dominated reef patches in the central Red Sea. Results from benthic chamber incubations revealed 87% increased gross productivity and a shift from net calcification to dissolution in algae-dominated communities after nutrient enrichment, but the same processes were unaffected by nutrients in neighboring coral communities. Both community types changed from net dissolved organic nitrogen sinks to sources, but the increase in net release was 56% higher in algae-dominated communities. Nutrient pollution may, thus, amplify the effects of community shifts on key ecosystem services of coral reefs, possibly leading to a loss of structurally complex habitats with carbonate dissolution and altered nutrient recycling.